Biden administration's request to reinstate the Student Debt Relief Plan denied by the Supreme Court
In an unsigned order, the Supreme Court indicated it expects the appeals court to provide a more detailed decision on the plan “with appropriate dispatch.”
WASHINGTON (AP) — On Wednesday, the Supreme Court upheld the suspension of the Biden administration's latest multibillion-dollar student loan plan, which aimed to reduce payments for millions of borrowers, while legal challenges continue in lower courts.
The justices denied the administration's request to reinstate most of the plan, which had been blocked by the 8th U.S. Circuit Court of Appeals.
In an unsigned order, the Supreme Court indicated it expects the appeals court to provide a more detailed decision on the plan “with appropriate dispatch.”
The Education Department's plan seeks to expedite loan cancellation and cut monthly income-based repayments from 10% to 5% of a borrower's discretionary income. Additionally, borrowers earning less than 225% of the federal poverty line—$32,800 annually for a single person—would not be required to make payments.
Last year, the Supreme Court’s conservative majority rejected a prior plan that aimed to erase over $400 billion in student loan debt.
Cost projections for the new SAVE plan differ. Republican-led states challenging the plan estimate a $475 billion cost over 10 years, while the administration references a Congressional Budget Office estimate of $276 billion.
Two separate legal challenges to the SAVE plan are ongoing in federal courts. In June, courts in Kansas and Missouri issued rulings blocking much of the plan, although debt previously forgiven under the plan remained unaffected.
The 10th U.S. Circuit Court of Appeals had permitted the department to continue with the provision for lower monthly payments. However, with the 8th Circuit blocking the entire plan, the Supreme Court found no need to intervene, as noted in a separate order issued Wednesday.
The Justice Department had proposed that the Supreme Court address the legal dispute over the new plan now, similar to its handling of the earlier debt forgiveness plan. However, the justices chose not to take up the matter.
